HMV Shutters Irish Operations, Appoints Receivers as Staff Stages Sit-In

Staff at two HMV stores in the Republic of Ireland have staged sit-in protests following the closure of the company's 16 Irish stores, according to reports.

HMV's Irish operations were placed into receivership yesterday (Jan. 16), 24 hours after HMV confirmed that it was suspending the trading of its shares and entering administration, the U.K. equivalent of Chapter 11 bank protection. It is understood that approximately 300 jobs are likely to be lost as a result of the 16 store closures.

HMV Appoints Administrators; Over 4,000 Jobs Under Threat

The BBC reports that staff at two HMV stores located in Limerick staged the sit-in protest to secure payment of owed wages. An HMV spokesperson confirmed that the company's Irish operations were now being managed by the appointed receivers, Deloitte Ireland.

"The receiver will institute an assessment of the viability of the company and its cost structure, including property occupational costs. All efforts will be made by the receiver to secure a purchaser for the stores," Deloitte Ireland said in a statement.

HMV's remaining 214 U.K. stores, which includes 10 HMV stores located in Northern Ireland and 9 Fopp retail outlets, are continuing to trade as normal, despite being placed in administration Jan. 14. The company also owns two stores in Singapore and six in Hong Kong. HMV says that its total number of HMV employees is 4,550.     

In addition to its financial woes, the company has been heavily criticized for its decision to no longer accept pre-paid gift vouchers following the appointment of Deloitte as its administrators. According to a report published by The Mirror, police were called to an HMV store in Oxford after two customers refused to leave when they were told that they would not be able to cash-in gift-cards.  

The news led British Conservative MP, Sir Tony Baldry to accuse HMV's bosses of committing theft by allowing the sale of gift cards throughout the Christmas period when it must have been aware "there was little prospect of those vouchers or gift cards ever being redeemed."

Commenting in The Guardian, Baldry, a practising barrister specializing in commercial law, said "directors and management must have known that the company was at very real risk of failure" whilst they continued selling vouchers "all through Christmas and up until the day they went into administration".

A story in today's South China Morning Post said shuttering the HMV's six Hong Kong stores would  hurt CD sales which still account for lion's share of local music revenue." CD sales revenue in Hong Kong fee 38% to $39.7 million between 2007 to 2011.

An article in yesterday's Financial Times suggested that several buyers -- including Hilco the retail restructuring group, Jon Moulton's Better Capital, Endless, a private equity firm, and Oakley Capital -- are among those considering purchasing the ailing retailer.

 

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